The main legal point established in the judgment is the limited scope of interference with an Arbitral Award under Section 34 of the Arbitration and Conciliation Act, 1996, and the requirement for the Award to exhibit patent illegality or error apparent on the face of the record to warrant setting aside.

JUDGMENT :

CHANDRA DHARI SINGH, J.

The instant petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter “The Act, 1996”) has been filed on behalf of the petitioner seeking the following reliefs:

“a. Set aside the impugned Award dated 05.03.2019 passed by the Ld. Arbitral Tribunal and dismiss the claim of the petitioner herein qua the respondent herein;

b. Stay the execution, operation and implementation of the Impugned Award dated 05.03.2019 passed by the Ld. Arbitral Tribunal during the pendency of the present petition;

c. Pass ad-interim relief in terms of prayer clause ‘b’ above;

d. Cost of the proceedings may also be awarded in favour of the petitioner;

e. Pass such other or further orders as this Hon'ble Court may just deem fit and proper in the facts and circumstances of the present case.”

FACTUAL MATRIX

2. The petitioner is a Government Company incorporated by the Central Government (Ministry of Railway) under the Companies Act, 1956 on 26th April 1976, originally under the name of Indian Railway Construction Limited, having its registered office at Palika Bhawan, Sector-XII, R.K. Puram, New Delhi. It is a leading Turnkey Construction Company in the Public Sector.

3. To provide an alternative and a reliable transportation system into Jammu & Kashmir, the Government of India planned a 326 Km. long Railway Line for joining the Kashmir valley with the Indian Railways network named as Udhampur-Srinagar-Baramulla Rail Link (USBRL Project). The project was declared a ‘Project of National Importance’. From Jammu to Baramulla, the length of the new rail line is 326 Km.

4. On 25th July 2013, the petitioner invited bids for participation in tenders for the construction of Tunnel T-74R balance work from ADIT between 127/660 Km to 130/950 Km. (length 3290 meters) on the Dharam-Qazigund section of the Udhampur-Srinagar-Baramulla New BG Railway Line project, and on 7th August 2013, subsequent to the invitation of bid, the petitioner issued Corrigendum No. 1 to Tender Documents modifying the functional requirement as provided in SCC-IIA.

5. The petitioner vide letter dated 25th October 2013 informed the respondent that the cycle time calculation did not match with the geological L section provided with the tender and asked for rectification.

6. The respondent, on 29th October 2013, certified that on encountering the same rock mass as stipulated in tender documents the desired rate of progress, that is, 95 m/month in the main tunnel and 110 m/month in the escape tunnel, would be achieved. The respondent further confirmed that the mobilization in all respects would be done within 60 days.

7. The bid of the respondent was accepted on 20th January 2014 vide Letter of Recommendation, and a Contractual Agreement dated 14th March 2014 was entered into between the parties pursuant to which the petitioner engaged the respondent as a sub-contractor for construction of the said project. As per Clause 22 of the Agreement, the work was to be completed within the stipulated time mentioned under the Agreement.

8. On 23rd April 2014, during the joint site inspection, many points were observed with respect to the functioning of the shotcrete machine deployed at the project site.

9. The petitioner, on 12th May 2014, scrutinized the progress and it was observed by the petitioner that the work was delayed as per the schedule and the respondent was directed to deploy appropriate resources as per the Contractual Clauses to achieve the required progress.

10. During the meeting conducted on 22nd May 2014, it was observed by the petitioner that the works progress as of the said date was only 62m as against the required progress of 210.50m as per the Contract and as such there was a shortfall of 148.50m.

11. On 27th May 2014, the petitioner once again informed the respondent that the non-improvement of linear tunneling progress had not improved s